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Electronic signature

How Does Digital Contract Signing Work? ‍

  • In our digital age, it's easier than ever to sign contracts. Electronic signatures make the process smooth, secure and environmentally friendly. Find out below how digital contract signing works and why it is increasingly preferred by both modern companies and private individuals.

Dealing with the old-fashioned way of signing contracts can be a real hassle. You have to print out the documents, physically sign them, and then send them through the mail. This seems pretty outdated considering we live in a digital age. Moreover, if there are people involved who are spread out in different places, it can take even longer and incur additional expenses.

In this article, we take a closer look at the practice of signing contracts digitally in the present day. We'll walk you through the ins and outs of how this process functions, discuss the various technologies that you can utilize for digital contract signing, and provide insights into where this method is likely headed in the future.

What is Digital Contract Signing?

Digital contract signing, or electronic signatures, is a way to sign documents online without using physical paper or ink. It's widely accepted legally and can be used for various types of documents, from simple agreements to complicated legal contracts. Digital signatures add a layer of security, ensuring that the signed document is both genuine and protected from tampering, preserving its reliability.

The adoption of e-signatures has led to significant cost savings for businesses. For instance, the implementation of e-signature systems can reduce document handling costs by 85% and paper-related shipping expenses by 80%. Furthermore, businesses that have adopted paperless operations often see a 90% decrease in processing errors.

Types of Digital Signatures

There are several types of electronic signatures, each offering different levels of security and complexity. Here are some common types:

  • Simple Electronic Signatures (SES): These are basic electronic representations of a person's handwritten signature. It could be as simple as typing your name or using a stylus on a touchscreen.
  • Advanced Electronic Signatures (AES): Recognized in many jurisdictions, advanced electronic signatures use a secure process to verify the identity of the signer and ensure the integrity of the document.
  • Qualified Electronic Signatures (QES): This is the most secure form of electronic signature, often requiring strict compliance with specific standards and regulations. It typically involves a digital certificate issued by a trusted certificate authority.
  • Biometric Signatures: This involves capturing unique biometric data such as fingerprints, voice patterns, or handwritten signatures using a digital device.
  • Click-to-Sign: This is a straightforward method where a person indicates their agreement by clicking a button or checkbox, signaling their consent.

How Digital Contract Signing Works: Step-by-Step

Understanding each stage ensures a smooth transition to the world of digital signatures, empowering you to make informed choices and enhance your contract signing experience.

1. Select an e-signature platform

In the process of selecting an e-signature platform, it's imperative to thoroughly research and compare various options. Take into account factors such as the platform's ease of use, security features including encryption and authentication methods, compatibility with other tools through integrations, pricing plans, and the overall reputation garnered through customer reviews. By considering these aspects comprehensively, you can make an informed decision that aligns perfectly with your specific needs and ensures a reliable choice for your digital contract signing requirements.

2. Upload contracts

Once you've decided on a platform, you can smoothly navigate its interface to upload the contract document you wish to be signed. It's important to ensure that the platform supports the file format of your document, whether it's a PDF, Word file, Excel spreadsheet, or another common format.

Moreover, some advanced contract management software allows you not only to upload existing contracts but also to draft new contracts directly within the platform. This feature streamlines the entire contract creation and signing process, offering greater efficiency and convenience. 

3. Add signature fields to the document

When it comes to integrating signatures into your documents using e-signature platforms, you'll find a variety of approaches. These platforms offer diverse features such as drag-and-drop functionality, checkboxes, and specific workflows that guide users through selecting the type of e-signature. Some platforms even facilitate the selection of the relevant person to sign, often coupled with email notifications to streamline the signing process.

4. Signers review and sign

In this stage, signers receive a notification prompting them to click a link, granting them electronic access to the document awaiting their signature. Before proceeding with the signing process, signers are given the valuable opportunity to thoroughly review the document's content. This review phase ensures that individuals can scrutinize the terms, conditions, and any other relevant information within the contract. Signers have the option to enhance the digital document with a personal touch by choosing to upload a scanned image of their handwritten signature. Additionally, certain platforms provide a digital handwriting signature feature, offering a blend of the traditional signing experience with the convenience of a digital format.

5. Track the signing process

It makes sense to leverage the comprehensive tracking features embedded in the e-signature platform to keep a vigilant eye on the signing progress. A central component of this tracking mechanism is a user-friendly dashboard offered by the platform. Within this dashboard, you gain visibility into the dynamic status of the document, allowing you to discern who has already signed, identify those yet to do so, and ascertain the precise moment each signer last accessed the document.

6. Contract completion and storage

Once all signatories have completed their electronic signatures, the contract is considered finalized. The e-signature platform will automatically generate a completed copy of the document, which is sent to you. Additionally, you can download the finalized document from the platform and securely store it electronically. This digital storage ensures easy retrieval and reference in the future, and it aligns with the paperless nature of the e-signature process.

Technologies Behind Digital Contract Signing

Now that you've recognized the increasing popularity of digital contract signing in recent years, do you know which technologies make it all possible? Let’s discuss some of the key technologies used for digital signing: 

  • Public Key Infrastructure (PKI): At the core of digital signatures lies Public Key Infrastructure (PKI). Acting as the electronic counterpart to handwritten signatures, PKI employs a pair of mathematically linked keys – a private key securely held by the signer and a public key accessible to all. When signing a document, the private key generates a unique code based on the document's content. This code, along with the signer's public key, becomes attached to the document, allowing anyone to use the public key for signature verification and ensuring the document's integrity.
  • Digital Certificates: Adding an extra layer of security, digital certificates are issued by trusted third parties, known as Certificate Authorities. These certificates bind a public key to a specific identity, providing assurance that the public key indeed belongs to the intended signer.
  • Encryption: Various encryption techniques safeguard sensitive information within contracts, such as financial details or personal data. This ensures that only authorized parties can access the document, preventing unauthorized modifications and bolstering overall document security.
  • Cloud-based Platforms: The contemporary landscape of digital signing solutions is predominantly cloud-based, offering users the flexibility to sign documents from any location and on any device. This eliminates the need for on-premise software installations, streamlining the signing process for all stakeholders involved.
  • Audit Trails and Document Management: Digital contract signing platforms often include detailed audit trails that meticulously track every action taken on a document, from the initial signature to subsequent modifications. These audit trails are not only vital for legal compliance but also play a crucial role in dispute resolution. Additionally, some platforms offer built-in document management features, simplifying the storage and retrieval of signed contracts.

Future Trends in Digital Contract Signing

It was only during the pandemic that most businesses realized the potential of digital signatures. In fact, the adoption of e-signatures saw a 50% increase in business usage only during the pandemic. Around 3 in 4 users now find it easy to sign documents using e-signatures, with the majority believing electronic signatures are more secure than manual ones.

Now, as businesses fully grasp the capabilities of this technology, the future of digital contract signing is overflowing with promising potential. Here are some key trends to watch out for:

1. Blockchain signatures

Imagine if your digital signatures were not just electronic scribbles but were backed by an unbreakable seal of security. That's the potential of using blockchain technology in digital signatures. Blockchain, known for its decentralized and unchangeable nature, can revolutionize how we sign digital documents.

Here's how it works: Instead of relying on a single, vulnerable database, blockchain spreads the signature data across a network of computers. This creates an indestructible record of signatures that's resistant to any tampering attempts. Every signature is not only logged but also stamped with a time and locked with encryption, making it practically impossible for anyone to mess with the signed document.

2. Artificial intelligence

Artificial Intelligence (AI) is changing how we handle documents and signatures, bringing a new level of efficiency and accuracy. With AI-powered systems, the information provided by humans can be turned into well-crafted documents and signature forms quickly.

Beyond just making things easier, AI in document management also takes away some of the workload for people and organizations. By automating complex tasks, AI ensures that different types of documents are handled consistently and accurately, freeing up time for more important work.

3. Verified digital identity

Companies worldwide are exploring the idea of providing a digital identity that is verified and linked to individuals' banking details. This verified identity serves as a crucial tool to prevent fraud in digital transactions and can be easily checked by various government bodies. Having a verified ID not only ensures secure digital signatures but also simplifies the process of logging into government institutions, making document signing more efficient with a certified digital imprint.


The evolution toward digital contract signing has ushered in a transformative era for business transactions and agreement management. The days of dealing with manual paperwork, printing hassles, and postage costs are fading into the past. With digital signatures, we've embraced a faster, more cost-effective, and secure way of handling contracts in our increasingly digitalized world.

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